A brewery located in Cincinnati is targeting the alcohol regulations of Pennsylvania.
In a recent development, Urban Artifact, a brewery renowned for its fruit-infused beers, has filed a federal lawsuit that claims Pennsylvania imposes unjust obstacles that hinder sales from businesses located outside the state. The lawsuit was filed in the U.S. District Court for the Middle District of Pennsylvania, marking a significant step in the brewery’s fight against what it perceives as discriminatory practices.
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Pennsylvania’s laws governing the direct sale of beer to consumers who purchase from out-of-state businesses are at the heart of the case.
Pennsylvania-based breweries have the advantage of being able to directly sell and ship their beer to customers, without any restrictions on quantity or volume. However, if these companies wish to sell their products to buyers in Pennsylvania from outside the state, they must first obtain a direct beer shipping license from the Pennsylvania Liquor Control Board, as well as a retail or wholesale license from their home states.
Out-of-state breweries are subject to restrictions despite obtaining licenses that come with fees. Customers are limited to purchasing 90 ounces of beer per month, and breweries cannot ship more than 96 ounces of a particular brand to a Pennsylvania customer.
In 2021, Urban Artifact possessed the necessary license to sell in Pennsylvania. However, the company chose to let it expire due to the high costs involved. Additionally, the license did not align with the way the club memberships were structured for their customers.
According to Jeffrey Jennings, the attorney representing Urban Artifact, the situation at hand is incredibly unjust for businesses located outside of the state. As Jennings explained to Local 12 in Cincinnati, being discriminated against solely due to one’s location is entirely unfair.
According to the lawsuit, Pennsylvania has violated the constitution by implementing laws that excessively burden interstate commerce despite their supposed local benefits. The suit is pushing for the rules to be invalidated in federal court as they unjustly discriminate against out-of-state economic interests.
According to the lawsuit, Pennsylvania lacks valid nonprotectionist grounds, or any constitutionally justifiable reasons, for imposing discriminatory and protectionist limitations on breweries located outside of the state.
Defendants in the lawsuit include PLCB Chairman Tim Holden and Pennsylvania State Police Commissioner Christopher Paris, as the state police are responsible for enforcing PLCB regulations.
At present, Urban Artifact has the ability to sell its beer online in approximately eight states and is looking to broaden its reach. As this is a federal case, the ruling could have far-reaching consequences for comparable laws governing interstate beer sales throughout the US.
The craft beer industry, which experienced a surge in growth over the past two decades, faced a major setback during the pandemic as numerous small and independent brewers were forced to shut down. However, despite a decline in beer sales, the Brewers Association revealed that the craft space had a record-breaking number of breweries in the United States in 2022, totaling to 9,683. This figure encompasses taproom breweries, brewpubs, microbreweries, and regional craft breweries.
With approximately 500 craft breweries, Pennsylvania ranks second in the United States, trailing only California. Despite its reputation as one of the most restrictive states in terms of alcohol regulations, Pennsylvania has relaxed many of its laws over the past two decades, thanks to a history of strict beer and liquor regulations.
In 2020, the number of new craft brewery openings across the country dropped by 9.8% compared to the previous year, with a total of 495 new openings. Unfortunately, the number of closures increased by 31%, with 418 businesses shutting down.
Urban Artifact, a renowned brewery, has garnered numerous accolades for its exceptional beer collection. Notably, the brewery bagged three gold medals at the esteemed U.S. Open Beer Championship. Among its wide array of fruity tart beers, the mixed berry-infused Gadget and the tropical Kaleidoscope are highly sought-after. However, the brewery’s legal representation, Jennings at Pacific Legal Foundation, argues that Pennsylvania’s laws are stifling the beer industry’s growth.
The foundation argued that imposing excessive regulations on diligent entrepreneurs solely based on their geographical location is unfair. Such regulations restrict their access to the market and limit their economic opportunities, which are readily available to their counterparts operating within the state.
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